The ingredients are in place for a massive oil price collapse - massive production, low...

The ingredients are in place for a massive oil price collapse - massive production, low breakeven costs, low financing costs, tight capacity - BAML says, seeing the possibility of $50 oil within the next 24 months. But with North American production costs relatively high and Saudi Arabia capable of decimating U.S. producers if it stepped up production enough, FT's Ed Crooks sees little chance of a dent in prices.

Without reading the whole report, it looks like the basic premise is that the same dynamics that crushed the price of NG will crush the price of oil. Weird analogy, as US NG is essentially trapped and in great supply, while oil is still being imported in large quantities and at Brent pricing. Brent would have to go to $50 for WTI to go to $50...

US consumption declines.US production increases.Cushing product ends up on Gulf.Cushing product starts getting sold to East Coast. European consumption declining.Chinese demand growth declining.Iranian oil not effectively on market.Sudanese production ramping up.Nigerian production a mess but likely to ramp up.Iraqi and Lebanese production ramping up.

Meanwhile NG continues to be cheaper by some 50% to oil.Energy efficiency keeps increasing.Most commercials/industrials are moving away from oil.There haven't any recent weather events to create oil demand.

blah blah it goes on and on.

This year's consumption numbers on oil, I expect, to show a huge decrease in overall domestic consumption.

Within 3 years some massive amounts of NG are going to be hitting the global market from projects under development worldwide (Indonesia, Israel, Australia, Kazakhstan) (the 'let's export our NG folks' to higher paying foreigners' will get caught out).

By then some measure of domestic US oil use will have gone to NG via NG hybridization of diesel powerplants and NG commercial fillup stations.

My interpretation is mostly that Brent contract is gaining in popularity because of low WTI demand not because of growing Brent interest. And that Brent will come down, regardless of Saudi currently expressed interest in maintaining $100 Brent; when Saudis get a clue on just how rampant demand destruction and energy source diversification is going on, they aren't going to defend that.